$41.00 per connection; make them count!

January 16th, 2011 by

I have been working with Lead Generators International (www.clientfinders.com), a telesales company, to target the construction industry in Alberta with a customer relationship management (CRM) system SalesForce.com.

The model that I used to measure the telesales program is as follows:
• You connect with 12% of the calls that you make.
• 50% of your connections convert to “interested”.
• 20% of your interested convert to a deal.
Example:
• 1000 calls = 120 connections
• 120 connections = 60 interested prospects
• 60 interested equals 12 deals

The reason I use the model is it gives a watermark to measure our results; this allows us to make adjustments to the program if we don’t meet the call objective. In the “construction” call program the biggest challenge I encountered was the conversations of “connections” to “interested prospects”. The problem was the prospect list that I had provided; many of the companies on the list did not have sales team. If you don’t have sales team or spend money on marketing it is a high probability that you do not require a CRM program.

The impact of not having a qualified list of prospects cost me money on the front end and reduced my probability of closing sales. Outsourcing telesales calls allowed me to understand my cost per call, spending $5000 for 1000 calls that is $5 per call and using the POIM model (that we will connect with 120 companies) that is $41 per connection. The goal was to connect with companies that have a sales teams, many of the connections made the companies did not have sales teams and this cost me $41.00 (that hurts) per false positive.

The good news is POIM is a sales 2.0 company and we were able to recognize the issue of converting connections to interested accounts; we used this information to modify the account list and improve our conversation ratio. Listed below is some information from CSO Insights 2011 Sales Performance Optimization “Comparing Formal Prospect Definition with No Prospect Definition”.

• Initial discussions progressing to a presentation, 43% of the companies with prospect definitions move over half of their prospects to the next step, as compared with 33% of the others.
• Presentations resulting in a sale, 51% move half their prospects to a sale, compared with 43% of the others.
• Proposals resulting in a Sale, 44% of our companies with prospect definitions close over half the prospects at the proposal step versus 29% of the companies having no prospect definition.
• Outcome of forecast deals the bottom-line difference brought on by formally defining your ideal prospect emerges here as a 9% difference in win rates.

Topics: Uncategorized